Why should early stage startups invest in their brand?

Branding supports internal management.

— Forces management to articulate, plan, and manage the goals of the organization.
— Provides an honest, charismatic, and executable identity to unify a company’s purpose.
— Creates a channel for expressing a company’s core values, business methods, and company mission.
— Forces research into audience. Encourages a focused company, product, and communications strategy.

Brands help weather setbacks.

— Outlives pivots, bumps, and mistakes.
Ex. Path’s initial launch gained hype, but not users. The company’s brand remained strong for 11 months while they worked on version 2.0.
— Maintain your success through multiple product iterations, even major changes.
— Users have faith in brands, advocate for brands, and identify with brands more than they do with software.

Brands build awareness.

— Build reputation, buzz, and attention before product launch.
— Position your product against its most vulnerable competitors.
Ex. Mailbox targeted the iPhone’s native mail app, not Sparrow or even Gmail.
— Branded content can melt servers.
Ex. Melted servers!
— A strong brand can enable you to fight out of your weight-class.
— Potential investors and mentors will take you seriously when you have a polished visual identity system.

Brands can get you acquired (or acqui-hired).

— A brand represents the company, entrepreneurs, and the employees, not just the product.
— Products fail, but a successful brand can support those that built it.

Orchestra, a simple and elegant to-do list app, was 2011’s App Store Productivity App of the Year. Orchestra applied its to-do philosophy to a new problem, email, and created an enticing, on-brand product and positioning for Mailbox. A simple video demonstrated the product and a novel waiting period for the app encouraged users to believe the company placed great importance on its quality of service [alternate source].

The result: Hype and media coverage was through the roof for an unreleased app, fueling breathless anticipation and desire. Check the URL of this early TechCrunch article.

Hipster teased with a gorgeous launch page (which spawned its own copycat startup) and, coupled with a name that attracted overjoyed and derisive speculation, gained 10,000 followers in two days with zero product details. However, when coupled with a hard pivot, the ambiguity of the brand (skinny jeans and…photo postcards?) proved a weak link. The product never gained significant traction and, despite being acquired by AOL, closed its doors about a year after launch.

Hipster first revealed itself to the public about a year ago through a mysterious landing page promising that “something cool is coming to San Francisco.” That, combined with the company name, was enough to drive massive interest. Eventually, when Hipster fully launched to the public, it pivoted away from its original focus, local Q&A, into an app for creating digital postcards. However, the company was probably better-known for its publicity stunts, which included recruiting engineers by offering $10,000 in cash and a year’s supply of Pabst Blue Ribbon, and a contest to send a user into “space” (in reality, a zero-G flight). [link]

The result: A sexy name can drive a lot of hype, but a solid brand provides clarity, understanding, and substance to a launch.

Dollar Shave Club launched long before founder Durbin starred in their now-famous viral video. But you never heard of it until then. The video was more than a piece of good content—it established the company as a scrappy upstart confronting a Goliath. Purchasing razors through DSC was not just economical, it was the smart way to give the finger to the Man.

Q. How did you convince your investors that you could compete with huge companies like Gillette?
A. I think our investors are savvy professional who understand the power of brands.
Q. What is your brand’s main selling point?
A. We see a big opportunity to make guys’ lives better and easier by creating a system of engagement where guys get the things they use every day seamlessly and without any type of pressure from us. That premise goes beyond razor blades. We are building the future of the Dollar Shave Club on the idea we want to be the easiest place for guys to get the things they need every day. And it all starts in the bathroom. [link]

The result: A bootstrapped startup can take on the big boys, get mainstream media coverage, attract users and funding, with the power of its brand.

Case Study 4: Qwikster and Netflix

Netflix was already the number one online video rental system around when it decided to split its growing streaming service from its aging DVD shipping system. Not only did Netflix introduce two names, they decided to use their well-regarded name for their new service, while changing the name of the long-standing DVD shipping system. Add an obtuse and confusing billing system (existing users of both services would now receive two bills for exactly the same product), and the outcry became unanimous. And it failed and they backpedaled. Don’t forget the Twitter account of Elmo smoking a joint.

Qwikster sounds like a lot of things–a super cool startup from 1998 that’s going to be totally rad and revolutionize the way you “surf” the “web”; something a cop in a 1930s talkie picture might call an elusive criminal; a nickname for Rainn Wilson’s genitalia–but a DVD-by-mail service in 2011 it does not. [link]

The result: Your brand reflects the core of your company and product. Build a good one. Don’t screw it up.